Computer Giants Streamline

Ibm Consolidating Operations, Burroughs Cutting Staff

October 09, 1986|By Christine Winter.

The nation`s two largest computer companies on Wednesday announced plans to further streamline their work forces.

Industry leader International Business Machines Corp., which warned Tuesday that third quarter sales would show a decline compared to last year, said it will relocate and consolidate some of its manufacturing and support staff, eliminating several hundred jobs.

IBM emphasized that it will not lay off any employees. Those whose jobs are dropped will ``be offered other jobs within IBM,`` according to the announcement.

Most of the jobs eliminated will be in the Westchester County, N.Y., area, and employees will be offered other jobs in the same area, the company said.

``Our full employment practice still prevails,`` said an IBM spokesman.

Burroughs Corp. said it plans to eliminate about 8 percent of its 120,000-member work force, most of them by the end of the year.

Massive cuts have been anticipated at Detroit-based Burroughs, which became the nation`s second-largest computer company after it merged with Sperry Corp. in August.

Burroughs Chairman W. Michael Blumenthal repeatedly has said he planned to boost profits by eliminating duplication of efforts.

``As a result of the merger, we are able to reduce redundant and duplicative functions and further streamline operations--a process undertaken by both organizations two years ago,`` he said in Wednesday`s statement.

``I can`t see where this would be any surprise of any kind to anybody,``

said a Detroit analyst. ``The whole argument for the merger on Burroughs` part was that they would be able to achieve certain economies of scale.``

Burroughs said the first round of reductions will be through a voluntary retirement program offering financial incentives and enhanced pensions to eligible employees.

However, the company emphasized that to meet its goal of eliminating 9,600 jobs, it also will institute selected hiring freezes and layoffs, in addition to relying on attrition and early retirement incentives.

Though Burroughs indicated in its announcement that early retirement offers would be made to employees of selected U.S. organizations, a spokesman could not say whether more former Burroughs or Sperry employees would be affected.

He added that the number of layoffs would depend on how many employees accepted the voluntary early retirement offer. He said about 1,000 employees would be eligible for the program, which requires 15 years of credited service at Burroughs or Sperry by age 55.

IBM announced a similar early retirement program last month. The computer giant has indicated that by combining limited hiring practices with attrition and the early retirement program, it hopes to reduce its work force by 12,000 by the end of 1987.

In Wednesday`s announcement, IBM said it will relocate the headquarters of all U.S. manufacturing and development groups and divisions in a new IBM-owned building nearing completion in Somers, N.Y., by early 1988.

Most of the employees affected work nearby in White Plains, N.Y.;

Montvale, N.J.; and Danbury, Conn., though a small number will move from San Jose, Calif., IBM said. IBM is based in Armonk, also in Westchester County.